Should I file again and do I qualify now?

[nizmoz]

I filed back in 2000 when I lost my job and had a bunch of debt.

I now currently have a job, but had medical issues that came up and got myself into a pretty steep debt. And now that some of my CC companies (WAMU) decided to up my interest rate for no reason to 24 % from 11%, that it is killing me financially.

I make around 42-43k a year, and I have a total debt not including my car $28400~. The car bumps it up to $68k. I do not plan to include the car and will continue paying it.

I basically pay around $2584 in all my bills, and my income is only $2895 a month after taxes. That doesn't include food. I am barely surviving as it is.

Can I do a Chapter 7?!

I have the following cards or loans:

Dell
Circuit City
NewEgg
Security Service Federal Credit Union (3 loans)
Wamu CC
Barclays Juniper
and one Doctor I owe

I was going to go to a lawyer for a free consultation Thursday, but I canceled the appointment before I knew about Wamu today. Now I am reconsidering again.

I am 34, single, pay rent (do not own a house or anything of value).

Any help would be greatly appreciated.

Thanks!

Russ
San Antonio, TX

[relief13035]

If I am reading this correctly, you have a $40k car that you can't afford????

[chrisdfw]

Do yourself a favor and get rid of the car. Unless you are an over the road trucker it is too much

[StartingOver08]

Yep, the car is the main issue if you file BK and keep the car you are shooting yourself in the foot. If you did not have the car, you would not have to file

[nizmoz]

If I am reading this correctly, you have a $40k car that you can't afford????

I bought it 2 years ago, I can afford it just fine before all my medical crap started happening.

I am not hear to discuss the car, I am hear to find out if I qualify or not. So please answer my question.

[HHM]

Ok, what is the car payment?

[nizmoz]

$866 a month. It is upside down thanks to the economy so I can't budge on it. Can't even refinance it due to the upside down.

[dogbone33]

That is a house payment! I don't even want to pay 400 per month for a car.

[HHM]

The car payment will be a problem, it far exceeds the IRS allowed ownership cost for a car, so many BK judges will not allow you to have that high a payment.

But, I know you don't want to hear this, that is too much car payment for your income, if you make $43,000 per year, that is $3583 per month, your car payment is 24% of your gross monthly income. As was previously stated, on your income, that should be your rent or mortgage payment. A car payment should be no more than 10% of your gross monthly income, so unless you don't pay rent, you CANNOT afford that car.

As for qualifying, you are over your states median income...a 1 person household in TX, the cap is $37,120.

If your willing to listen to real advice, here is what would be your best option
1. Dump the car and get something in the $300 per month range.
2. You will most likely be a chapter 13, but you should do that, because on your income, you cannot pay back the debt on your own. A chapter 13 will get you in control of the situation. (even if you got a cheaper car).
3. Since, aside from your car, you have no other secured debt, your odds of qualifying for a chapter 7 are not good. But, you should still file a chapter 13.

[fltoo]

$866 a month. It is upside down thanks to the economy so I can't budge on it. Can't even refinance it due to the upside down.

New cars are upside down the moment you drive them off the lot. Does not matter how good or bad the economy is.

If you get rid of the car and get a cheaper payment as others suggested, you can put 500. into an emergency fund every single month and be in control of your finances if something arises that is not covered by your monthly income.

[nizmoz]

Okay, and how can I get a different car when I can't even get out of this one. It is showing to be over 10k upside down per NADA blue book. I will still have a high payment if I switch to let's say a Corolla. So unless I let the bank reposes the car, which I rather not do, I don't have much room to do anything.

[fltoo]

You live in TX, a no wage garnishment state. Stop paying the car and eventually do a voluntary repossession. Save the money and buy a 2-3000 used car depending on how long you can get away with keeping the car.

Let the SOL on the loan run out. If they get a judgment, just close your bank accounts and pay with money orders until the SOL expires. They can't touch your paycheck.